Managing after Downsizing

Millions of Americans lost their jobs at the start of the COVID-19 pandemic earlier this year, with the unemployment rate reaching 14.7 percent in April, the highest since the Great Depression almost 90 years ago. In fact, so many lost their jobs that even now, more than six months later, 7.9 percent of us are unemployed (September’s rate).

And yet, when taking into consideration what the U.S. Labor Department calls “discouraged workers” and those holding part-time jobs, the unemployment rate for August was actually higher at 14.2 percent. (The “official” unemployment rate for August was 8.4 percent.)

Employers continue to downsize

Yet layoffs continue: The Washington Post on October 1 called it a “grim portrait” of the country’s economy as “a cascade of new layoffs announced…puts pressure on an already strained labor market….” The article also reported that 837,000 Americans filed for unemployment the previous week.

The job losses are understandable: the economy tanked in the spring and while it is growing now, it’s a slow growth. What’s more, companies that arguably could bring employees back may be loath to do so due to the fact that the pandemic will still be with us over the next few months, resulting in a continuing shaky economy.

Managing your people AFTER downsizing

Regardless of your company’s near-term workforce needs, if you’ve recently laid folks off, now you need to pivot to managing your employees and your business with fewer workers.

Some suggestions:

1. • Communicate frequently with your remaining workers about how things stand now. Be candid and expect to hold such communications regularly: weekly isn’t too often.
   • Sincerely express regret about your need to let people go. Your remaining employees probably are missing their former co-workers, may be worried about their friends’ futures and are grieving the loss they feel having them as part of their day-to-day lives.
   • Make sure your workers understand how much you appreciate the work their departed colleagues did for the company.
   • If this is the case – and only if it’s the case – let your workers know that you have no plans for additional layoffs for the foreseeable future.Take good care of your remaining workersChances are great they are experiencing the following: grief over the loss of their colleagues, worry that they’ll be let go next and stress as they work to do the jobs of their departed coworkers as well as their own.Granted, many downsizing decisions no doubt were due to lack of sales and therefore workers still with you may not have to do the work of departed employees due to a decrease in workload company wide.

     But if they are?

2. Ask your employees how you can make their new reality easier.Solicit suggestions and ideas company-wide as to how to make adjustments in work processes, workflow and workloads, as well as in the structure of your organization. Your employees will appreciate the fact that you care enough to ask and more than likely will have a ton of great ideas you could implement.Doing so can really help your retained workers feel more connected to your company: something like “we’re all going to make it through these tough times together.”

   This especially is true if your remaining employees’ workloads have increased significantly since the layoffs. Sympathize with their increased job duties and listen to their ideas about ways to lessen it, while still keeping their productivity levels up. (Remember: studies have shown that 74 percent of employees remaining after a downsizing saw their productivity decline afterwards.)

3. Once you’ve downsized, crunch some numbers and look to the futureTake into account the financial and the non-financial costs related to your downsizing. What are all the costs – and the benefits – involved? Look at severance packages (if applicable), unemployment insurance payouts, lower employee productivity from your remaining workers, lost opportunity costs should something pop up and yet you don’t have the manpower to take advantage of it, and so on.Also, consider investing in areas your customers feel are important (such as more CSR workers, for example). Doing so while your competition cuts back can help you overtake them as the economy improves.
4. Create a solid downsizing processAs much as you don’t want to lay employees off again, you may have to (see “continuing shaky economy,” above).Gather managers and executives together and create a committee that creates a downsizing process that makes it as easy as possible for everyone involved and respectful to those you are letting go.

   Consider providing managers training in how to lay off someone correctly. Also consider offering some assistance in helping laid off employees make their way through filing for unemployment benefits, resume creation, job search help, and so on

(Business) life goes on after downsizing

No matter how many people you let go in a layoff, your business more than likely will continue. In fact, someday – and, we hope, sooner than one thinks – your business again will grow.

When your company starts thinking about hiring, consider easing into it with the contract, contract-to-hire and direct-hire staffing options we offer here at The Intersect Group, which allow both you and our candidates the chance to try each other out before committing to a “full” employment relationship. Learn more.